Correlation Between Serve Robotics and SEB SA

Can any of the company-specific risk be diversified away by investing in both Serve Robotics and SEB SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Serve Robotics and SEB SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Serve Robotics Common and SEB SA, you can compare the effects of market volatilities on Serve Robotics and SEB SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Serve Robotics with a short position of SEB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Serve Robotics and SEB SA.

Diversification Opportunities for Serve Robotics and SEB SA

-0.34

Correlation Coefficient

Serve Robotics  SEB SA

Very good diversification

The 3 months correlation between Serve and SEB is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Serve Robotics Common and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB SA and Serve Robotics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Serve Robotics Common are associated (or correlated) with SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of Serve Robotics i.e., Serve Robotics and SEB SA go up and down completely randomly.

Pair Corralation between Serve Robotics and SEB SA

Given the investment horizon of 90 days Serve Robotics Common is expected to under-perform the SEB SA. In addition to that, Serve Robotics is 6.51 times more volatile than SEB SA. It trades about -0.16 of its total potential returns per unit of risk. SEB SA is currently generating about 0.29 per unit of volatility. If you would invest  8,620  in SEB SA on December 2, 2024 and sell it today you would earn a total of  1,070  from holding SEB SA or generate 12.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Serve Robotics Common  vs.  SEB SA

Serve Robotics Common

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Serve Robotics Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Serve Robotics showed solid returns over the last few months and may actually be approaching a breakup point.

SEB SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SEB SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SEB SA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Serve Robotics and SEB SA

The main advantage of trading using opposite Serve Robotics and SEB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Serve Robotics position performs unexpectedly, SEB SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SEB SA will offset losses from the drop in SEB SA's long position.

The idea behind Serve Robotics Common and SEB SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .